Concerning modifications to the disaster emergency fund.
Summary
HB26-1396 modifies Colorado’s disaster emergency fund and the reporting rules tied to it. The bill requires the Office of State Planning and Budgeting to tell the Joint Budget Committee which disasters have been closed out and how much unencumbered money was transferred back to the original source fund. It also defines “close out” and “unencumbered” for purposes of the disaster emergency fund, creating a formal process for ending a disaster subaccount once response and administrative work are complete.
The bill sets deadlines for closing out disasters: within three years after the last recorded revenue or expenditure for federally declared disasters, and within eight years for state-only disasters. It also caps the annual unencumbered balance of the disaster emergency fund at $200 million and requires excess money to be transferred to the general fund after August 12, 2026, and each June 30 thereafter. In effect, the bill changes how long disaster-related money can remain in the fund and when unused balances must be returned to the state’s general operating account.
Impact
The bill amends Colorado Revised Statutes sections 24-33.5-703 and 24-33.5-706, adding definitions and new fund-management requirements. It affects the Department of Public Safety and the Office of State Planning and Budgeting by imposing closeout timelines, reporting obligations, and a mandatory transfer of excess unencumbered balances to the general fund. It also changes how disaster subaccounts are tracked and how leftover money is reallocated after a disaster is resolved.
Sentiment
The available context suggests the bill moved through the legislature without recorded controversy in the provided materials and was ultimately signed by the governor. Its structure and fiscal-management focus indicate a generally pragmatic, budget-oriented approach, with support likely centered on improving transparency and preventing large idle balances from accumulating in the disaster emergency fund.
Contention
The main policy tension in the bill is between preserving flexibility for future disaster response and limiting the amount of money that can remain unused in the disaster emergency fund. Supporters are likely to favor the reporting requirements, closeout deadlines, and the $200 million cap as accountability measures. Potential concerns would come from those who prefer a larger reserve for emergencies or who worry that transferring excess funds to the general fund could reduce readiness for future disasters, especially if a long-tail recovery effort is still underway.